City exploring idea of helping with farm purchase

The Elk River City Council appears open to at least considering becoming a financial partner in the purchase of the Houlton Farm for a park.

At issue are deferred special assessments from a 1992 project that brought city sewer and water to the western area of Elk River. The Houlton Farm was assessed $142,178, which was deferred under the Green Acres program. Today the assessment plus interest totals $346,779 and would have to be paid if the land were sold.

At a work session Monday, the City Council heard from brothers Bill and John Houlton, representing the farm’s ownership group.

The family is interested in selling the 335-acre farm and seeing it become a city park, but the special assessments are one of the issues. The Houlton brothers said it doesn’t seem fair that the assessment has to be paid for sewer and water that will never be used if the farm becomes park land and is never developed.

John Houlton said they objected to the assessment back in the early 1990s. The matter was left with an understanding that the farm would ultimately probably become city park land and, if and when that happened, the city would be open to the idea of a donation in lieu of assessments for all or some of the property, he said.

John Houlton said their ownership group is “willing and able and happy” to take somewhat less than market value for the farm so it becomes a park, but there are still economic realities.

“We have a gap to close because we have to make this transaction something that we can sell to the members of our extended family and the others that are not in this room that don’t live in this community and don’t have any particular emotional attachment to Elk River,” John Houlton said. “It’s our hope that we can all find a way to get to a place, a good place, that works.”

Mayor John Dietz said he has met with the Houltons and respects their position. But he is concerned about setting a precedent and fairness if the city were to forgive all or part of the farm’s special assessment.

Council Member Paul Motin said his “gut feeling” is he wouldn’t be comfortable waiving the entire assessment but thinks it would be appropriate to waive part of it.

“Had this property always been park land it wouldn’t have been assessed in the first place,” Motin said.

Council Member Stewart Wilson said the city needs to do what it needs to do to acquire the property.

“This is a once-in-a-lifetime opportunity for the city to acquire some of the more premier property within the community,” Wilson added. “I certainly don’t want to give the city assessments away … but I think we should try to negotiate something to bring this to fruition.”

He said he’d hate to see the farm slip through the city’s fingers and thinks they’d all be sorry if they allowed that to happen.

City Administrator Cal Portner was leery of waiving all or part of the special assessment, saying the city should protect the integrity of the assessment process. But he said one option the city could consider is becoming a financial participant in the purchase of the farm, with the city’s contribution being used to pay some or all of the farm’s assessment.

The city has been working with TheConservation Fund to secure funding to buy the farm and turn it into a nature-preserve-type park. A grant of approximately $2 million is being sought from the Minnesota Department of Natural Resources, with other funding sources anticipated to augment that.

Initially no city funds were expected to be needed to fund the purchase of the farm.

The council on Monday directed Portner and City Attorney Peter Beck to look into the matter further and report back.